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The IRS recently released guidance (Revenue Procedure 2026-25 (PDF - 75.98KB)) providing that gift tax returns (Form 709) are generally not required for individuals making Trump account contributions if certain “safe harbor” conditions are met.
Trump accounts are a new type of tax-advantaged savings account for children introduced under the law known as the One Big Beautiful Bill Act. Trump accounts could first be established beginning in 2026, but no contributions could be made until July 4, 2026.
These new accounts function like traditional individual retirement accounts (IRAs) for eligible minors and are generally subject to an aggregate annual contribution limit of $5,000 (subject to a cost-of-living adjustment after 2027). In addition, each qualifying child born after Dec. 31, 2024, and before Jan. 1, 2029, is eligible for a one-time $1,000 federal contribution to a Trump account, which will not count against the aggregate annual limit. Additional information on Trump accounts can be obtained online at Trumpaccounts.gov.
Individuals and their estates generally are subject to gift, estate, or generation-skipping transfer tax liability (collectively referred to as the gift tax) once the value of cumulative transfers during life and at death exceeds the inflation-adjusted lifetime basic exclusion amount, which is currently $15 million. The gift tax generally applies to a transfer of property by way of gift, whether the transfer is in trust or otherwise, whether the gift is direct or indirect, and whether the property is real or personal, tangible or intangible.
There is also an annual per-donee gift tax exclusion from the total amount of the donor’s gifts during a calendar year. Specifically, each donor may exclude from the amount of the donor’s gifts those made to a particular recipient to the extent that the total value of the donor’s gifts to that recipient does not exceed this annual exclusion amount, provided that those gifts are not of a future interest in property.
For calendar year 2026, the annual exclusion amount (as indexed for inflation) is $19,000 per individual recipient and is available in addition to the donor’s lifetime basic exclusion amount (the cumulative amount excluded from gift and estate taxes).
Gifts are also subject to certain reporting requirements. The gift tax rules generally require an individual making one or more gifts to file a gift tax return to report gifts made during the calendar year. The return must generally be filed on or before April 15 of the following calendar year. If the donor’s total gifts to each recipient (other than gifts of future interests in property) in a calendar year are valued at or below the annual per-donee gift tax exclusion amount ($19,000 for 2026), then a gift tax return is generally not required to be filed for those gifts.
The safe harbor provided by Rev. Proc. 2026-25, exempting a donor from the requirement to file a gift tax return, applies for a particular calendar year only if all of the following requirements are satisfied:
- The donor is an individual
- The donor’s only taxable gifts during the calendar year are cash contributions to one or more Trump accounts, each made before the beneficiary reaches age 18
- The donor’s total gifts during the calendar year to each individual who is an account beneficiary do not exceed the annual exclusion amount
- Contributions to Trump accounts made during the calendar year do not generate a gift tax liability for that calendar year
- Disregarding the Trump account contributions, the donor is not required to file, and otherwise does not file, a gift tax return for the calendar year for any other reason
The IRS explained that it is issuing this safe harbor because of public commentary raising questions about the gift tax consequences for individual donors who make contributions to Trump accounts. Such reporting would generally be required if contributions to Trump accounts are treated as gifts of future interests.
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